Mobile Payment Platform Wars: LevelUp, Paydiant, PayPal, & More

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in mobile payments; PayPal is particularly interesting locally because its Boston office, with its DNA from the acquired startup Where, is all about mobile and analytics.

Adjacent to startups like LevelUp and Paydiant are companies like Foursquare and Swipely, which are increasingly pursuing retail marketing, loyalty, and analytics. And plenty of other startups such as Dwolla and Plastiq (which recently raised $6 million in venture funding) are trying to enable new kinds of online transactions. Leaf and WePay are also interesting players; the latter just rolled out a mobile-payment app for small businesses last week.

There are overarching issues around who will own the customer data and relationships—and, of course, around consumer privacy. Big retailers want consumers to use their branded apps (think Target, Walmart). Banks want people to keep their money in bank accounts, not PayPal (which also competes with credit cards). Payment networks want to integrate with everyone. Local merchants want something that works reliably and brings in new and repeat customers.

The consensus seems to be that mainstream adoption of mobile payments is still a few years away. “It’s going to take a while,” says Gardner, who points out that consumers will have to overcome “50 years of muscle memory on swiping plastic.”

Nevertheless, local startups are making progress. LevelUp recently passed 1 million users, a figure that Priebatsch calls “significant to our merchant customers.” He adds, “People who ignored us a year ago, we can say, ‘Consumer mindshare has shifted.’ Now it’s a real adoption curve.”

And the race is on, as he says, to become the default leader in the sector. “We’ve got this year to be the best and then, if we pull that off, 2014 will be the year of expansion,” Priebatsch says.

As befits his app (and company) name, he adds, “We haven’t hit a level where we can rest or be comfortable.”

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Gregory T. Huang is Xconomy's Editor in Chief. E-mail him at gthuang [at] Follow @gthuang

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3 responses to “Mobile Payment Platform Wars: LevelUp, Paydiant, PayPal, & More”

  1. Hi Greg,

    Great article. I’m also excited to see which of all of these players comes out as a leader; however, I would also add that other factors like data security are going to weigh as much as marketing and loyalty. I wouldn’t rule technology out of the debate at all, especially given the nature of the data these companies are dealing with.

    Question: With all the software and application solutions being put forth this year, what impact do you think hardware will have on the payments sector?


  2. Nice story, but I think we as an industry should focus more on helping businesses understand the advantages that mCommerce can provide TODAY. The “wait and see” model does not work for businesses struggling to survive and thrive in this challenging economic and competitive environment.

    Businesses can capitalize on the “first mover” advantage to get a head start capturing more market share. They will learn from experience what works best and what to avoid in terms of payment/commerce technology. That experience will help them evolve more quickly and sharpen their ability to nurture and retain existing customers as well as attract new ones at the same times since mobile commerce is much more than just payments.

    I provide two recommendations to help merchants navigate the mobile commerce space in my post: Let’s remove the friction and help merchants grow their businesses – starting now.

  3. PhilipCohen says:

    What a poor article—no mention of MasterCard’s “MasterPass” or vIsa’s “” new digital wallets …